On track: Increased investment into infrastructure is set to propel the industry
London, United Kingdom (PRWEB) August 01, 2013
The Railway & Underground Railway Construction industry operators are responsible for the assembly and maintenance of rail tracks. Operators are employed by rail organizations and regulators such as Network Rail, Transport for London, and NI Railways for Northern Ireland. These organizations are funded by the government's Department for Transport and also generate income from private train operators and commuter fares. The industry has been supported by a number of projects over the past five years. The commencement of the Cross rail scheme has boosted the performance of firms that have been fortunate to be awarded these contracts. According to IBIS World industry analyst Temitope Onabanjo, “this investment into infrastructure has saved the industry from the turmoil that the majority of construction industries have endured over the past five years”.
While investment into infrastructure has been a priority for the government, the financial crisis that hit the UK economy in 2008 has done much to mute this investment. Public expenditure on transportation for rail dipped by over 10.0% in 2008-09 and severely affected the amount of work available for contractors. However, developments in London prior to the capital's hosting of the London 2012 Olympic Games, such as the regeneration of the East London line was a breath of fresh air for the lucky few. Over the five years through 2013-14, revenue is expected to increase at a compound annual rate of 0.6% to total £2.6 billion. A stronger performance is anticipated for 2013-14 with revenue estimated to grow by 5.9%, as developments on major projects continue.
Onabanjo adds, “The Railway & Underground Railway Construction industry is expected to flourish over the next five years through 2018-19, growing strongly as the overhaul of the UK's rail infrastructure intensifies”. Continuing developments on the Crossrail project is likely to provide growing employment opportunities as various stages move into construction. The development of the High Speed 2 (HS2) has also been commissioned and is currently in the design stage. This should provide major opportunities for contractors once it is in the construction stage. The government has also backed plans for the development of Crossrail 2. However, this is unlikely to come to fruition for a number of years.
The industry's ownership concentration is considered to be medium, despite the large number of very small-scale contracting firms. Relatively few large-scale, multi-disciplined firms compete for the lead contractor role on major railway construction projects, and the four largest contractors contribute about 25.3% of annual industry revenue. These are multi-disciplined construction firms Balfour Beatty, Colas Rail, Babcock Rail and Amey. These are typically the preferred lead contractors for projects commissioned by organizations such as Network Rail and Transport for London.
For more information on the Railway & Underground Railway Construction industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
This industry includes contractors undertaking work in the construction of railway and underground railway infrastructure, including site preparation, rail track placement, and the construction of associated structures (bridges, tunnels and platforms). Construction activity includes new work, repair, additions and maintenance on existing infrastructure. Portions of the work can be subcontracted out and the firms can operate as construction manager on railway projects.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
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Cost Structure Benchmarks
Barriers to Entry
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